The retail industry is transforming. Facility professionals have seen the changes over the years within their stores, whether it is new technologies being installed or what (and how) the shopper is making transactions within the store. Now it’s time for the landlords to respond to this transformation.
In the ICSC RECon educational session, “Envision 2020 Town Hall: Redefining Our Industry,” Stephen Lebovitz, ICSC Chairman and President and CEO of CBL & Associates Properties, Inc., led a panel discussing how shopping centers are reacting the transformation of retail. Out of all of the discussion between the real estate developers, it became clear: Shopping centers are becoming a hybrid between community center and retail destination. This is especially true of shopping centers, usually built in the late 80s, early 90s, which now need to be repositioned due to decreased traffic or other high performing centers in the area. The experts all agreed the most successful repurposed shopping centers will embrace interactive and engaging new concepts that are appropriate for their surrounding demographics.
Brick and mortar is not dead by a long stretch, just transformed into more of an experience. The new measure of success for landlords is the length of time people are staying in the complex – are they attending a cooking class and following it with dinner? Are they going to the children’s museum and then swinging by to get a new outfit?
This new measurement does pose a threat to how leases are developed. Square footage is no longer always an acceptable factor when a tenant isn’t selling any goods. These interactive experiences and stores who are choosing to “showcase” their goods to eventually be bought online will need a new type of lease to take into account the community areas being utilized. Retailers are becoming successful bending the physical and digital shopping experience, but now it is time for shopping centers to transform how they are structuring how to structure their leases and account for non-revenue businesses using the common spaces.
The repurposing of shopping centers will also be advantageous for the supplier community, as the suppliers are already familiar with the properties and can gain these new concepts as customers. How do you think the transformation of the shopping mall will continue to change how vendors and retailers do business?